Consolidated Obligations

9 Months Ended

Sep. 30, 2020

Consolidated obligations consist of consolidated bonds and consolidated discount notes. The FHLBanks issue consolidated obligations through the OF as their agent. In connection with each debt issuance, each FHLBank specifies the amount of debt it wants to have issued on its behalf. The OF tracks the amount of debt issued on behalf of each FHLBank. The Bank records as a liability its specific portion of consolidated obligations for which it is the primary obligor.

Although the Bank is primarily liable for its portion of consolidated obligations, the Bank is also jointly and severally liable with the other ten FHLBanks for the payment of principal and interest on all consolidated obligations of each of the FHLBanks. The Finance Agency, at its discretion, may require any FHLBank to make principal or interest payments due on any consolidated obligations whether or not the consolidated obligation represents a primary liability of such FHLBank.

Although an FHLBank has never paid the principal or interest payments due on a consolidated obligation on behalf of another FHLBank, if one FHLBank is required to make such payments, Finance Agency regulations provide that the paying FHLBank is entitled to reimbursement from the non-complying FHLBank for any payments made on its behalf and other associated costs including interest to be determined by the Finance Agency. If the Finance Agency determines that the non-complying FHLBank is unable to satisfy its repayment obligations, then the Finance Agency may allocate the outstanding liabilities of the non-complying FHLBank among the remaining FHLBanks on a pro rata basis in proportion to each FHLBank’s participation in all consolidated obligations outstanding. However, the Finance Agency reserves the right to allocate the outstanding liabilities for the consolidated obligations among the FHLBanks in any other manner it may determine to ensure that the FHLBanks operate in a safe and sound manner. The par amounts of the 11 FHLBanks’ outstanding consolidated obligations were $819.9 billion and $1,025.9 billion at September 30, 2020 and December 31, 2019, respectively.

Additional detailed information regarding consolidated obligations including general terms and interest rate payment terms can be found in Note 13 to the audited financial statements in the Bank's 2019 Form 10-K.

The following table details interest rate payment terms for the Bank's consolidated obligation bonds as of September 30, 2020 and December 31, 2019.


(in thousands)	September 30, 2020		December 31, 2019
Par value of consolidated bonds:
Fixed-rate	$	19,844,650	$	29,292,200
Step-up	40,000		705,000
Floating-rate	21,573,250		36,707,000

Total par value	41,457,900		66,704,200
Bond premiums	100,567		85,028
Bond discounts	(7,683)		(8,350)
Concession fees	(4,810)		(6,118)
Hedging adjustments	37,333		33,047
Total book value	$	41,583,307	$	66,807,807

Maturity Terms. The following table presents a summary of the Bank’s consolidated obligation bonds outstanding by year of contractual maturity as of September 30, 2020 and December 31, 2019.


	September 30, 2020				December 31, 2019
(dollars in thousands) Year of Contractual Maturity	Amount		Weighted Average Interest Rate		Amount		Weighted Average Interest Rate
Due in 1 year or less	$	30,135,080	0.48	%	$	50,306,900	1.83	%
Due after 1 year through 2 years	4,160,445		2.13		7,268,705		2.10
Due after 2 years through 3 years	1,805,650		2.39		2,705,420		2.36
Due after 3 years through 4 years	1,257,825		2.47		1,469,400		2.58
Due after 4 years through 5 years	1,107,625		1.78		947,375		2.69
Thereafter	2,991,275		2.14		4,006,400		2.73

Total par value	$	41,457,900	0.94	%	$	66,704,200	1.96	%

The following table presents the Bank’s consolidated obligation bonds outstanding between noncallable and callable as of September 30, 2020 and December 31, 2019.


(in thousands)	September 30, 2020		December 31, 2019
Noncallable	$	36,784,650	$	61,597,600
Callable	4,673,250		5,106,600
Total par value	$	41,457,900	$	66,704,200

The following table presents consolidated obligation bonds outstanding by the earlier of contractual maturity or next call date as of September 30, 2020 and December 31, 2019.


(in thousands) Year of Contractual Maturity or Next Call Date	September 30, 2020		December 31, 2019
Due in 1 year or less	$	32,028,080	$	54,157,900
Due after 1 year through 2 years	4,171,445		6,573,705
Due after 2 years through 3 years	1,793,650		2,623,420
Due after 3 years through 4 years	1,142,825		1,063,400
Due after 4 years through 5 years	812,625		827,375
Thereafter	1,509,275		1,458,400

Total par value	$	41,457,900	$	66,704,200

Consolidated Obligation Discount Notes. Consolidated obligation discount notes are issued to raise short-term funds. Discount notes are consolidated obligations with original maturities up to one year. These notes are issued at less than their face amount and redeemed at par value when they mature. The following table details the Bank’s consolidated obligation discount notes as of September 30, 2020 and December 31, 2019.


(dollars in thousands)	September 30, 2020			December 31, 2019
Book value	$	13,995,722		$	23,141,362
Par value	13,999,828			23,211,524
Weighted average interest rate (1)	0.16		%	1.61		%

Note:

(1) Represents an implied rate.